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Before signing that pension form, think of you at 70

Africa News News African November 1, 2026 · Comments off

Almost every Kenyan with a workplace pension knows this moment or will one day. Your last day at work arrives, the goodbyes are said, and somewhere in the paperwork a form appears offering you access to your retirement savings. Rent is due. A relative’s school fee is pending. There is a business idea you have nursed for years. The money is yours, it is right there, and old age feels very far away.

Yet that single signature can shape the life you will enjoy at 70. It is a moment that deserves far more thought than it usually gets.

The inaugural SanlamAllianz Retirement Benchmark Report Kenya 2026, released this month and to be repeated every year surveyed 300 Kenyans at different stages of life. Among those who had left a job or closed a business with retirement savings available, 53 percent withdrew some or all of that money. Only 32 percent kept or transferred the full amount for retirement.

But the most revealing finding comes next. Of those who withdrew, 65 percent said they understood the effect on their retirement, and more than half later rued the decision. People are not withdrawing because nobody told them. They are withdrawing because life, at that moment, is pressing harder than the future.

Nor is this a story of careless spending. A third of those who withdrew used the money to start or support a business or farm. Another 16 percent spent it on healthcare or an emergency. These are people making hard choices.

And Kenyans are already investors. The survey found that 69 percent save or invest every month outside compulsory pension deductions, and 75 percent said if they could change one thing, they would have saved more. What holds them back is not unwillingness. Household and family costs, cited by 44 percent, and low or irregular income, cited by 37 percent, top the list of barriers.

So, what should an ordinary investor take from all this? The report points to three lessons that apply to almost every household.

First, time is your greatest asset, not the size of your contribution. Pension money grows through compounding, where returns earn further returns over decades. Every early withdrawal sets that clock back, and years of growth are hard to recover. If you change jobs, ask about transferring your savings to your new scheme or a preservation deal before you sign on anything.

Second, look past the headline return. The report cites the Zamara actuarial survey of 402 schemes, which found an average annualised return of 13.5 percent over the five years to June 2026. Take away illustrative fees of two percent and inflation of about six percent, and the real gain in purchasing power is closer to 5.5 percent. What you can buy in retirement matters more than the number on your statement, so ask your scheme what you are paying and what you are actually earning after inflation.

Third, think in monthly income, not lump sums. Only 29 percent of respondents know roughly how much they will need each month in retirement, yet 51 percent say they would prefer a guaranteed income for life. A large balance at 60 means little if it runs out at 67. Work out what your household costs today, then ask your adviser what your savings can realistically pay you each month.

Healthcare deserves special attention. The survey found that 53 percent had either only thought about medical costs after retirement or had no plan at all. Yet medical bills often rise just as regular income stops. Building medical cover into your plan while you are still earning makes it far easier to manage later.

Investors should not have to carry this alone, especially as the way Kenyans earn is changing. According to the Kenya National Bureau of Statistics’ Economic Survey 2026, the informal sector accounted for 87.2 percent of new jobs created in 2025, and in our survey, 39 percent of working respondents say what they earn varies from month to month. This means a pension system built only around the monthly payslip will leave many people behind.

As pension providers, we can work with trustees and regulators to make staying invested the easy choice, offer advice at the moments that matter rather than handing over forms, and design products that allow small, flexible contributions without abandoning the discipline long term saving requires.

The writer is the Chief Executive Officer and Principal Officer of SanlamAllianz Life Insurance (Kenya) Limited

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